US law - Forum non conveniens explained

A New York decision sheds light on the application of the principle of forum non conveniens by US courts.

A famous quote by the equally famous Lord Denning says: “As a moth is drawn to the light, so is a litigant drawn to the United States”. Clearly any plaintiff will try to have a claim for compensation heard by a court in a jurisdiction which is known for its generous awards in matters involving personal injury or death. Likewise, most defendants will attempt to have such claims dismissed and re-filed in a less onerous jurisdiction and one way of achieving dismissal can be to assert the so-called “forum non conveniens” principle. Defendants will accept that a court has jurisdiction (both personal and subject matter) but still argues another forum or court is more convenient, for example because of the location of witnesses. When deciding whether or not to apply this principle, there are certain well-established aspects the court will have to consider, of which some are given more weight than others. In a recent decision of the United States District Court, Southern District of New York,¹ Judge Charles Haight shows, in impressively clear and convincing language, how the principle is applied.

Facts
The heavy lift vessel STELLAMARE capsized in the port of Albany, New York, during loading of a heavy generator in December 2003. As a result of the capsizing, two Russian seafarers tragically lost their lives. The families of the deceased seafarers duly received the contractual death compensation for which they executed releases in January 2004. Later on, in January 2005, the widows filed a complaint in the District Court, Southern District of New York against the owner of the vessel alleging cause of action under the Jones Act and the general maritime law of the United States. The owner moved to dismiss the complaint asserting that the casualty and the resulting deaths were not covered by the Jones Act and did not fall within the general maritime law of the United States. While the owner acknowledged that the action fell within the court’s admiralty and maritime jurisdiction, it moved for dismissal on the ground of “forum non conveniens”.

The decision
The judge agreed with the defendant’s argument that in the circumstances of the case plaintiffs were not entitled to invoke the Jones Act and US general maritime law. In order to arrive at that conclusion he discussed the applicability of the Act and the general maritime law. He quoted from a 1976 decision:² “although the Act, by its terms, may be invoked by alien seamen against alien employers, the Supreme Court has limited its application to suits in which the defendant has some substantial contact with the United States". In determining whether the contacts in a given case are "substantial", the judge continued, the Supreme Court has identified the following contacts as worthy of consideration:
1. the place of the wrongful act;
2. the law of the flag;
3. the allegiance or domicile of the injured party;
4. the allegiance of the shipowner;
5. the place where the contract of employment was made;
6. the inaccessibility of a foreign forum, and
7. the law of the forum.

This is not an exclusive list; the Supreme Court has held that the shipowner’s base of operations is also an important contact and "there may well be others".³ As to the applicability of the general maritime law of the United States, the judge again quoted from the above 1976 case: “[this] is subject to the same choice of law criteria as is the Jones Act”. Thus, when the circumstances of a case reveal no substantial connection between the action and the United States, the plaintiff may invoke neither the Jones Act nor American general maritime law.

The judge then considered each of the above seven aspects and concluded “without difficulty that the Jones Act and the general maritime law of the United States do not apply to this action”.

Of particular interest is the statement that, although the accident occurred within American territorial waters, the location of the accident by itself is not sufficient to establish that substantial connection between the action and the United States which is required by the cases interpreting the Jones Act and American general maritime law. “That is particularly so where, as here, all the other relevant factors militate against the applicability of the statute or general maritime law to this particular casualty”.

The shipowner had agreed to appear and to defend any lawsuit filed in the courts of Russia (the domicile of the plaintiffs), the Netherlands (the flag state of the STELLAMARE) or the Netherlands Antilles (where she was registered). Therefore, the judge said, a foreign forum was accessible.

Although the judge concluded the Jones Act and US general maritime law were not applicable, the court could still exercise its admiralty and maritime jurisdiction, but the owner had moved to dismiss the complaint on the ground of “forum non conveniens” so the judge turned to that aspect of the case. The central purpose of a forum non conveniens inquiry is to determine “where trial will be most convenient and will serve the ends of justice”.

Forum non conveniens analysis
There are three steps in a forum non conveniens analysis:

1. The court has to establish the existence of an adequate alternative forum.
In the current matter it was easy to find that such alternative existed; i.e., the Netherlands, the Netherlands Antilles or Russia. In addition, as mentioned above, the owner had agreed to appear in any lawsuit filed by the plaintiffs in any of these alternative jurisdictions. It is particularly noteworthy that the forum non conveniens doctrine can be applied even if the law applicable in the alternative forum may be less favourable to the plaintiff.

2. Deference due to the plaintiffs’ choice of forum.
While ordinarily there will be a strong presumption in favour of plaintiffs’ choice of forum, there are also other considerations to be made, of which the most important is whether a plaintiff chose a particular forum for genuine convenience or for tactical advantage. In the STELLAMARE case the judge noted that the plaintiffs, Russian citizens with no contacts with the United States, “chose this District for ‘tactical advantage’ rather than for ‘genuine convenience’. Consequently that choice will be accorded little deference”.

3. Private and public interest factors.
Under these factors the court must weigh the public and private interests in order to determine which forum will be the most convenient and will best serve the ends of justice. Private interest factors include the relative ease of access to sources of proof, witnesses, etc., and “all other practical problems that make trial of a case easy, expeditious and inexpensive”. With the plaintiffs and the majority of the crew domiciled in Russia, the defendant domiciled in the Netherlands and the vessel’s whereabouts unknown (she was sold soon after the accident), the judge found that “against this flood of indications that this forum (New York) would inconvenience the parties’ litigation efforts, the plaintiffs construct only the flimsiest of dikes”.
Public interest factors include “administrative difficulties for courts when litigation is piled up in congested centers”. In addition, “jury duty is a burden that ought not to be imposed upon the people of a community which has no relation to the litigation”. In the present case, the judge also found that the public interest factors militated in favour of dismissal of the action on the ground of forum non conveniens.

Conditions
The judge ordered that the complaint be dismissed, without prejudice to the merits, on the ground of forum non conveniens, but imposed the following conditions: if within two years the plaintiffs commenced any action in any of the alternative jurisdictions mentioned, the owner would have to file an appearance, defend the action on the merits and waive any time bar defence which might otherwise be available under the law of the jurisdiction chosen. In case the defendant owner failed to abide by the conditions, the plaintiffs could re-apply to the New York court for reinstatement of the action and that application will be granted.

Comment
This is a very interesting and well-written decision, containing a thorough analysis of how the forum non conveniens doctrine is applied under US law.